Allscripts Drops Suit Against NYC Public Health System

N.Y. health system disputed the claim that it will overpay for rival Epic Systems' electronic health record system.

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Electronic health records (EHR) vendor Allscripts Healthcare Solutions has dropped its lawsuit against New York City's public hospital system and rival vendor Epic Systems, Allscripts and city officials said Monday.

"Allscripts Healthcare Solutions, Inc., has discontinued its legal action against the New York City Health and Hospitals Corporation regarding the award of the Integrated Clinical Information System contract and looks forward to having the opportunity to work with HHC on other matters in the future," Chicago-based Allscripts said in a brief statement sent to the media.

Similarly, the New York City Health and Hospitals Corp., (NYCHHC), which runs 11 hospitals, dozens of clinics, and a health plan serving 420,000 people across the Big Apple, released a brief statement indicating that it was "pleased that Allscripts has withdrawn
the lawsuit."

Neither Allscripts nor the health system would comment further, though an Allscripts spokeswoman confirmed that the company also has dropped its case against Epic, of Verona, Wis. An Epic media liaison relayed via e-mail an explanation from COO Carl Dvorak that the suit was really an issue between NYCHHC and Allscripts and that the case was resolved "prior to our active engagement."

Allscripts sued New York City and Epic in October after the NYCHHC awarded Epic a $302.8 million contract the previous month to replace an existing patchwork EHR with an integrated system to cover 11 hospitals, 70 outpatient clinics, four long-term care facilities, and six diagnostic treatment centers. Epic beat Allscripts in its bid for the 15-year contract, which includes software, database licenses, maintenance, upgrades and other services.

The suit, filed in New York state court, claimed the Allscripts technology would cost NYCHHC half the estimated $1.5 billion it would spend in total to install, operate and maintain Epic's product over a decade and a half. The typically tight-lipped Epic had no comment on the suit at the time -- Epic as a rule does not issue press releases -- but the New York health system disputed that claim.

"Epic was chosen for its functional superiority, outstanding level of integration, its strong corporate foundation, and for being more able to service the diverse needs of HHC," Ian Michaels, spokesman for the NYCHHS said in an e-mail at the time Allscripts sued. "Allscripts' allegation that its proposal is significantly less expensive than Epic's is false and fails to acknowledge all of the costs HHC considered to support its integrated, patient-centered model of care. HHC anticipates that the Allscripts complaint will be found to be without merit."

Epic has won a number of big-dollar enterprise contracts in recent years at the expense of Allscripts and many other competitors. This month, Allscripts joined Cerner, McKesson, Athenahealth, Greenway Medical Systems and McKesson subsidiary RelayHealth to form the CommonWell Health Alliance, an interoperability consortium widely seen as a response to Epic's domination of the large-system market.

The same day, Allscripts also announced acquisitions of dbMotion and Jardogs, two companies involved in health information exchange and interoperability linkages.

In December, Allscripts fired longtime CEO Glen Tullman and president Lee Shapiro and brought in former Cerner executive Paul Black to run the business. The Allscripts spokeswoman did not address whether the decision to drop the suit was part of the company's new direction.

As large healthcare providers test the limits, many smaller groups question the value. Also in the new, all-digital Big Data Analytics issue of InformationWeek Healthcare: Ask these six questions about natural language processing before you buy. (Free with registration.)

I find it absurd that Allscripts would sue only because they lost a contract to Epic. The suit was without merit to begin with and it doesnG«÷t surprise me at all that they chose to withdraw it. Everyone has the right to choose what service they prefer, and in this case Epic turned out to be the best suited for the needs of HHC.